Price risk coverage at zero cost

Markets
1

I would need to cover the price risk of a share through the options by using a zero cost structure. E.g.: buy a share at 2,5$ and would like to sell it in 12 months at 2,55. How can I use options in order to be sure to sell at 2.55$ at zero cost for this coverage?

2

Selling a Call Option at a strike price of $2.55 would enable you to lock in the price of your target and cover the cost of the transactions involved. But, if the price goes above $2.55 you would lose out on potential profit. If the price of the asset goes below $2.55, you would lose on the stock and the Option would expire worthless during expiration. So, no free lunch.

We hope this helps.

Thanks,
Matt Zimberg
Optimus Futures